Foreign Ownership and Corporate ESG Performance

Abstract

Foreign shareholders are important participants in China's capital market. This article explores the relationship between foreign shareholders and corporate ESG performance, aiming to explore how to guide foreign shareholders to play a positive role in Chinese listed companies. The study reveals the following findings: There is a significant positive correlation between foreign shareholding and corporate ESG performance, indicating that foreign shareholders can promote the improvement of ESG performance. Foreign shareholding enhances ESG performance through two channels: constraining short-termism by managers and improving information transparency.Media attention significantly strengthens the positive relationship between foreign shareholding and corporate ESG performance.The research in this article provides empirical evidence for the government's gradual relaxation of the foreign shareholding ratio and encourages foreign shareholders to have a long-term investment perspective. It also helps listed companies formulate appropriate policies to effectively utilize foreign resources.